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Private pension increases are 'misleading'

21 April 2006

Recent research from Clerical Medical showing that pensions have improved and increased over the past few years has been dismissed as misleading by financial group Prudential.

The study showed that private pension income has more than doubled since 1979, with the past five years showing a period of unheralded growth in the private sector of retirement funds.

While admitting that such statistics were not necessarily inaccurate, Anthony Frost, a spokesperson from Prudential, has said that claims suggesting pensions have gone up in real terms is false.

"I wouldn't dispute that pensions have gone up, but not in real terms," he argued. "Many pensioners need an additional £3,000 or £4,000 to their income [and] people cannot rely on a state pension anymore as it represents an income of only £5,000 per year."

Mr Frost added that despite the rise in retirement income from pensions, this did not necessarily equate to an improved standard of living due to rises in the cost of amenities and the average living wage.

"Pensioners may have more money than before but it doesn't mean that they have a better life," he said.

Malcolm McLean of the pensions advisory service agreed with the Prudential's point of view, saying the research was "out of date", and that in the next decade "the line will be coming down".

"Pensioners are now better off than they will ever be in the next few years," Mr McLean added.